States don't have economies; metropolitan
regions have economies, says John Adams, Professor Emeritus of
Geography, Planning and Public Affairs at the University of Minnesota.
States have budgets, not economies, he says, while metropolitan areas
are economic building blocks of the national economy.

Adams describes three main ways for a
metropolitan economy to support itself: (1) the Bernie Madoff, or
theft, model, in which cartels act to curtail competition and to
charge prices higher than an authentic free-market price; (2) the
Steve Jobs, or innovation and production model, which is based on
creativity, entrepreneurship and hard work; and (3) the lottery model,
based on luck, in which a region sells its unearned wealth in exchange
for products and services imported from elsewhere. He says the
healthiest regions support themselves with the innovation and
production model. The Madoff and lottery models undermine economic
health, promote inequality in society and curtail economic growth.

He points out that businesses have both
profit and loss statements and balance sheets each year, while
governments look only at whether revenues-in match expenditures-out.
Without balance sheets, governments don't account for depreciation or
for future liabilities, such as debt or pension obligations.

Adams concludes that a negative trend is
that we're moving away from an economy of earning money to an
economy of making money. But a positive trend is an increasing
attention to thinking in balance sheet terms about what we do today
and its implications for tomorrow.

Average response ratings shown below are
simply the mean of all readersí zero-to-ten responses to the ideas
proposed and should not be considered an accurate reflection of a
scientifically structured poll.

Readers were asked to rank the following on
a scale of 0-10 ("not at all important" to "very important").

1. Value of topic.

(9.1 average response)
How useful to you is today's
interview?

2. Value of further study.

(8.4 average response)
How important is scheduling
additional interviews on this topic?

Readers were asked to rate, on a scale of
(0) most disagreement, to (5) neutral, to (10) most agreement, the
following points made during the discussion.

3. One-sided schemes harmful.

(9.1 average response)
Schemes allowing people to receive
economic benefits for themselves without giving something equal back
to the economy are undermining the nation's economic health, promoting
social inequality and curtailing economic growth.

4. Narrow interest groups benefit.

(9.1 average
response) Such schemes occur when
narrow interest groups, without any investment on their part, receive
subsidies or other special privileges at public expense.

5. Transactions should be balanced.

(9.1 average
response) By contrast, in a fair
and efficient economy parties to any transaction are informed,
transactions are voluntary and benefits are equal on both sides.

6. People feel entitled today.

(8.3 average response)
Today many people feel entitled to
what they're receiving, rather than feeling that what they receive
needs to be earned.

7. US under-investing in youth.

(8.2 average response)
The nation is under-investing in
young people to create the entrepreneurs, business leaders and
productivity needed for the future.

Response Distribution:

Not at all

Slightly

Neutral

Moderately

Very

Total Responses

1. Usefulness of topic.

0%

0%

0%

41%

59%

17

2. Importance of further study.

0%

0%

18%

35%

47%

17

Response Distribution:

Strongly disagree

Moderately disagree

Neutral

Moderately agree

Strongly agree

Total Responses

3. One-sided schemes harmful.

0%

0%

6%

44%

50%

18

4. Narrow interest groups benefit.

0%

0%

6%

33%

61%

18

5. Transactions should be balanced.

0%

6%

0%

33%

61%

18

6. People feel entitled today.

0%

0%

6%

61%

33%

18

7. US under-investing in youth.

0%

0%

6%

72%

22%

18

Individual Responses:

Ray Ayotte (10) (5) (10) (10) (10) (7.5)
(10)

Kevin Edberg (10) (5) (10) (10) (10) (7.5)
(10)

1. Value of topic. The rent seeking/rent
capturing concepts are of great value if we/anyone are to re-engage in
a different means of public governance. I'm cynical about our ability
to collectively achieve that. (The current discussion about stadium
construction and rent-seeking are a poster-child). The concept of a
state's "balance sheet" in addition to its "income statement" is a
powerful concept, probably more accessible to most of us (and the
general public) than the topic [of] rent-seeking/rent-capturing. It is
very worthwhile for anyone to champion a greater understanding of the
forms of wealth, and particularly how wealth has been transferred in
our history to create our well-being today. (Think Homestead Act for
individuals, westward expansion of railroads paid for by land grants,
mining of iron ore/taconite, and harvesting of 100-300 years of white
pine growth created fortunes and prosperity (and some very
concentrated wealth) for enterprises connected to transportation,
mining, and lumber in a previous century. How and whether these forms
of wealth transfer still work in the 21st century (mining aquifers,
for example) would be a useful public discussion.

2. Value of further study. See comments
above.

3. One-sided schemes harmful. Of course
the Wilfs and others will suggest that the fans (distinct from the
general public) will capture the "full and fair value" of the
investment via the watching of a game. Panis et circenses is a
more appropriate analogy.

4. Narrow interest groups benefit. And
the more we create disparate wealth through policy and action, the
more we enable and incent the recipients of that wealth to use more
and more of it to protect their station.

5. Transactions should be balanced.
True. But the economy that was known to Adam Smith is nowhere close
[to] the economy known to us in the 21st century. There is a value in
asserting the overall value as the benchmark for what an economy
"should" be like. A greater value is in trying to understand how that
applies in a global economy with great wealth disparity, instantaneous
communication of information and ideas, virtually instantaneous
transfer of capital, and not-instantaneous-but-pretty-damn-fast
intercontinental movement of goods and people.

7. US under-investing in youth. No
question. The folks who hold wealth are old...which is why we spend so
much money on health care in the last 6 months of life, and
under-invest in pre and post natal health care. The same for pre-K
education. This is where the concept of a balance sheet comes in
handy, with inter-generational markers for wealth and well-being.

Bruce A. Lundeen (10) (10) (10) (10) (10)
(7.5) (7.5)

Don Anderson (7.5) (7.5) (10) (10) (10)
(7.5) (7.5)

Dave Broden (7.5) (10) (7.5) (10) (10) (10)
(10)

1. Value of topic. A well thought out
and expressed view of the workings of the economy and how to view it.
A fresh and innovative look that challenges some of the conventional
thinking and yet gives new insight.

2. Value of further study. Understanding
the economic models or thoughts from differing views is critical to
formulating a vision of moving forward for economic and quality of
life growth in Minneso.

3. One-sided schemes harmful. This needs
more discussion and understanding of the focus of the point. If
redistribution without added value (i.e., work) is not included, that
is not a plus; if incentives for work and opportunities enable
equality, that is another direction. Finding the right balance is the
challenge.

4. Narrow interest groups benefit.
Subsidies or privileges without added value in some way are often (not
always) a misallocation of resources if looked at from a balance
sheet.

5. Transactions should be balanced. This
is true but in reality we need to find a system that strikes a
reasonable balance among multiple approaches of subsidies/special
actions and voluntary actions.

6. People feel entitled today. The
concept of entitlement has become a base for much of the economy
rather than the concept of "earning" the rewards.

7. US under-investing in youth. This
question is so broad it is difficult to answer. If the subject is
education, the answer is investments are poorly applied and may be
lower than required for results. If we add in other investments in
various technologies or objectives that support the goals of the
question, then that is a question of allocation of resources.

Dennis L. Johnson (10) (10) (10) (10) (10)
(10) (7.5)

7. US under-investing in youth. Young
people are strongly investing in themselves with massive student loans
to achieve their educational goals.

Marina Lyon (10) (10) (7.5) (7.5) (2.5) (5)
(7.5)

1. Value of topic. Everything shared was
important. I especially appreciated the balance sheet concept for
governments. It would be very interesting to see the extent of
financial and other issues at all levels of government.

2. Value of further study. I'd love to
see a study that [puts] large blocks of business activity in Minnesota
into John's categories. It would also be interesting to learn which
industries seek and receive the most subsidies from governments,
providing a glimpse into how hard this might be to change.

5. Transactions should be balanced.
Whether benefits are always equal is questionable. Sometimes people
get into transactions out of necessity (foreclosure, short sales,
etc.) where equality is not a promised outcome.

6. People feel entitled today. What's
the definition of too many? For me to agree, I'd some further
definition of this class of people.

Paul and Ruth Hauge (7) (9) (8) (7) (8) (8)
(9)

Tom Spitznagle (10) (10) (10) (8) (10) (10)
(7)

Chuck Lutz (9) (8) (9) (8) (8) (6) (8)

Fred Zimmerman (10) (10) (10) (10) (10) (10)
(8)

Johnís session was both excellent and
useful. We should be more detailed, when concluding we are
"under-investing" in young people, however. Clearly, we are presently
spending a lot of money, but it is doubtful that we are getting what
we are paying for. We would all like our young people to be better
prepared, so there is sentiment in favor of investment. But we are
going to have to redesign the delivery process if we want better
results.

Wayne Jennings (6) (7) (9) (9) (9) (7) (8)

This is a hard topic to get a wrench on but
very important particularly about unfunded pensions not showing up on
public balance sheets, which we don't have.

Lyall Schwarzkopf (10) (9) (9) (10) (9) (9)
(9)

When I was City Coordinator, I wish I had
known these principles. I would have recommended some very different
ideas.

Fred Senn (10) (10) (10) (10) (10) (10) (7)

Can you tell I'm a fan of John Adams?

Bright Dornblaser (8) (5) (10) (10) (8) (8)
(10)

Roger A Wacek (na) (na) (5) (5) (10) (10)
(5)

Gene Franchett (10) (10) (9) (9) (9) (7) (9)

Tom Swain (9) (8) (9) (10) (10) (9) (7)

The Civic Caucusis a non-partisan,
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